Nick Ayton Head of Funding Data and Calculations Funding and payments in the Apprenticeship Service Empowering employers to build skills through quality apprenticeships Nick Ayton Head of Funding Data and Calculations

Guidance The information contained in this presentation is included in the published Technical Funding Guide. https://www.gov.uk/government/publications/apprenticeship- technical-funding-guide

Single funding model (funding bands) Number Band limit 1 £1,500 2 £2,000 3 £2,500 4 £3,000 5 £3,500 6 £4,000 7 £5,000 8 £6,000 9 £9,000 10 £12,000 11 £15,000 12 £18,000 13 £21,000 14 £24,000 15 £27,000 The upper limit caps - the maximum: amount of digital funds an employer who pays the levy can use towards an individual apprenticeship. that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds Employers negotiate the best price for the training they require. The negotiated price does not include: VAT English and maths (up to level 2) Learning support Additional payments Framework uplift Employers can spend more than the funding band limit using their own money (not the levy) Funding bands do not have a lower limit All apprenticeship framework pathways and standards are allocated a funding band (15 in total) The funding band caps the maximum amount that government will pay (either through levy or co-investment) Employers and provider negotiate a price – for employer providers it is the estimated price of delivery Prices can be negotiated above or below the band –employer must pay the provider any funding above the band Price only covers the training, delivery and assessment – it doesn’t cover additional payments/uplifts

Co-investment The government will co-invest up to the funding band maximum where: an employer does not pay the levy an employer has insufficient digital funds The co-investment rate is 90% of the earnings in a particular month The exceptions are: small businesses with fewer than 50 employees and the apprentice is either young or disadvantaged Including small employers who also pay the levy.

Funding elements for the new model There are 3 main elements in the new funding model: Completion element - 20% of the lower of either the funding band maximum or the negotiated price is withheld for completion. Monthly instalments - the remaining 80% is split over the duration of the apprenticeship Additional payments – additional funding earned at particular times in the apprenticeship

Monthly instalments and completion example Total negotiated price = £16,000, but the band limit is £15,000 Employer directly pays the provider the £1,000 above the band maximum 20% is held back for completion = £3,000 (20% of £15,000) Apprentice starts 15 August 2017 and planned to finish on 23 August 2019, covering 24 census dates £12,000 over 24 months = £500 per month planned instalments We withhold 20% of the price up to the band maximum for completion Remaining 80% is equally split over the each month the apprenticeship is planned to last Aug 17 Sep 17 ... Jun 19 Jul 19 Aug 19 Planned instalments £500 Expected completion £3,000

Additional payments for the young / disadvantaged Applies to apprenticeship standards and frameworks There are additional payments for apprentices who are: aged 16 to 18 years old when they start aged 19-24 who left care or have a local authority Education Healthcare plan For these learners we will pay the following amounts: Per apprentice at 90 days at 365 days Total to employer £500 £1,000 to provider

English and maths English and maths up to level 2 Where an apprenticeship requires the apprentice to study English or maths up to level 2, the government will fully fund eligible English and maths qualifications at a rate of £471. Includes British Sign Language This is the same value as in the current Trailblazer pilot. How they are funded The cost of English and maths are not included in the total price negotiated between the employer and provider, unless it is level 3+ These costs are fully funded These costs are not taken out of employer’s digital accounts. There is no completion element and the funding is equally split across the duration of the qualification.

Learning support Learning support No change from current systems. Earned at £150 per month as in current system. If there is evidenced need, providers can claim excess learning support and exceptional learning support through the Earnings Adjustment Statement. How they are funded The cost of learning support is not included in the total price negotiated between the employer and provider These costs are fully funded These costs are not taken out of employer’s digital accounts

Transitional support for frameworks (1 of 2) Training providers will receive additional transitional support for delivering apprenticeship frameworks through: 16-18 framework uplift 20% of funding band maximum Also applies to 19-24 year olds formerly in care or have Education and Health Care plan Funding is earned like the apprenticeship: 20% upon completion 80% split across monthly instalments “We will keep it under review and envisage reducing this uplift as more apprenticeship starts are on new apprenticeship standards.”

Transitional support for frameworks (2 of 2) There are additional payments for providers for apprentices who are from areas of deprivation, and start an apprenticeship framework. These are transitional payments for one year only. We use the Index of Multiple Deprivation (IMD) from 2015, with the apprentice’s Postcode Prior to enrolment. Additional payments per apprentice on a framework at 90 days at 365 days Total apprentices from 10% most deprived areas £300 £600 apprentices from 11-20% most deprived areas £150 apprentices from 21-27% most deprived areas £100 £200

Apprenticeship service Data matching for levy employers only Employer Provider Apprenticeship service Apprentice 1 Provider A ILR The data items to be matched: Learner: Unique Learner Number Provider: UKPRN Total price When the apprenticeship started Apprenticeship ID: LARS codes The employer will need to authorise the apprenticeship for us to use the funds from their digital account to pay the provider We match the key information

Apprenticeship service data and payment Submit ILR Indicative Data match and Reports Final data submitted Final data match Payment Reports You submit an ILR and we will produce indicative reports to tell you if data doesn’t match the data in the digital account and what you have earned When the ILR window has closed will we will run these reports again and provide final reports, explaining which learners are levy funded and which are co-invested

Guidance The information contained in this presentation is included in the published Technical Funding Guide. https://www.gov.uk/government/publications/apprenticeship- technical-funding-guide